IR35

IR35 is the difference between the employee and the self employed.It is applied to all the contractors who are not self employed as per HMRC.And what HMRC refers to as the disguised employee.

I can explain this by using an example of an employee who is working in the same company where he was working as a permanent employee but now they are working as contractor under limited company in order to save tax.

IR35, and does if applies to you?

HMRC believes that as the director of the company you should be wholly responsible for the work you do under the limited company if you try to work under the same responsibilities as the permanent employee than you might caught up under the IR35 and might have to pay the full NIC and PAYE rather than taking the salary and dividend through the limited company.

Is there any benefit if you are inside the IR35?

Director at Excellence Accounting says that “If you think that you fall inside the IR35 than you have to be really sure that you still want to run the company, the questions you need to be sure of are in order to keep the limited company are: is there any other contractual work you might receive that you can put through the limited company than YES or under the current contract on which you will be paying the full tax but still you will be able to claim the following expenses like: 5% of the turnover, benefits from the flat rate scheme which is going to be (up to 2,000) and can put the funds in the business savings account and receive interest thus it is still worth keeping the company running.

The correct way to find out whether you fall under the IR35 is to take the expert advice. At Excellence Accounting Limited we strongly advice our clients to get the expert advice, we work with several partners who help in advising our clients in regards to their contracts.

For more expert advice please contact Accounting for contractors; Find accountant in London team of Excellence Accounting Limited. Our contact details are : accounts@excellenceaccounting.com or by phone 02032894704